Moving your credit card debts onto an interest-free balance transfer card could end up saving you more than £800 in interest payments.

With the average length of interest-free periods on top balance transfer cards now standing at 23.2 months, those struggling with a financial hangover this January can save themselves hundreds of pounds as they get back on their feet.

MoneySupermarket has found that consolidating £3,000 of debt onto Barclaycard's market-leading 24-month zero interest card would save £830 in interest compared with keeping the debt on a card with the average market rate of 17.32 per cent APR.

Balance transfer: Moving your debts can save you hundreds of pounds in interest.

Kevin Mountford, head of banking at MoneySupermarket, said: 'For people who are struggling to pay off
their credit card debt quickly, the New Year is a good time to take
action.

'Moving leftover credit card debt onto a cheaper deal could save
hundreds of pounds in interest. There’s a lot of competition at the
moment in the balance transfer cards market which will benefit people
looking for a better deal.

'Using a zero per cent balance transfer
card is a no-brainer - it allows you to pay off your existing balance
over time without accruing additional interest.

'I would advise anyone
looking to pay off debts to make a plan and budget accordingly;
otherwise the debt could remain when the promotional offer comes to an
end.'

The average length of zero interest periods has increased compared to the same time last year, when there were just two cards available with periods longer than 20 months.

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Now Barclaycard, MBNA, Natwest,Halifax and HSBC are among those to offer periods of 23 or 24 months, and at the same time the average handling fee to make a balance transfer has reduced from 3.18 per cent in January 2012, to 3.05 per cent now.

Some of these providers have periodically cut the transfer fee in half.

Those who do move their debt to a balance transfer card should ensure they make the minimum payments each month, or they shall lose the right to the introductory offer and will get charged interest on their balance transfer.

They should also check the level of zero interest on any new purchases made using the cards, as these are much shorter than those offered for balance transfers.

Being approved for a card is also not guaranteed, with those with better credit histories more likely to be approved and those with poor records rejected. Those who do get rejected should bear in mind that applying for several balance transfer cards in quick succession will affect your credit rating.

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